Crypto Market Drops Below $3T as Treasury Yields Top 5%

On Sept. 23, US Treasury Yields surged past 5%, putting a brake on the crypto market rally. Bitcoin price has once again retraced below the $85,000 level, as the overall crypto market correction stands at 2.4%. Analysts are now pricing in an October rate hike, as investors assess the market’s direction going forward.

Crypto Market Takes A Dive Under $3 Trillion

Following today’s broader market correction, the total market cap across all cryptocurrencies has dropped under $3 trillion. Just days before, the market had crossed this milestone, amid a strong rally following the US CPI data, and even the CLARITY Act cloture vote.

However, this time, the reason behind the crypto market correction is the 10-year US Treasury yield surging to 5.13%. This comes after a sharp 17 basis points jump on Sept. 23.

The Treasury is preparing to buy back up to $6 billion in longer-term debt, while market expectations for an October interest-rate hike have risen to 64%, according to Polymarket data.

If so, it could be the second consecutive interest rate hike that started in September. Higher Treasury yields are also raising concerns over mortgage costs, with rates of 7.5% or higher potentially ahead, noted analysts at The Kobeissi Letter.

What Does Today’s Crypto Market Pullback Tell

Today’s crypto market correction is yet another example of flushing out leverage, with more than $505 million in liquidations in the last 24 hours. Of these, the long positions alone accounted for $358 million. Bitcoin accounted for $143.1 million in liquidations, while Ethereum saw $104.4 million, despite recent strength in both assets.

Bitcoin price may be pulling back to $84,000 today, but the broader crypto market trend remains strong, noted analysts at AskClash. BTC is up 11.6% this month and is currently on pace for its best September on record. Historically one of Bitcoin’s weaker months, September 2026 is shaping up to reverse that trend.

In its latest weekly report, Glassnode noted that Bitcoin’s price is now trading above the short-term cost basis, at $77,000. It means that there could be some profit booking, however, it remains light as of now.

On the other hand, inflows into spot Bitcoin ETFs have continued to remain strong. On September 23, net inflows across all US ETFs totaled $346.98 million, extending their 5-day inflow streak. The five-day inflows reached $2.65 billion, the highest level since October 10, 2025.

BlackRock’s IBIT led the inflows with $166.29 million, followed by Fidelity’s FBTC with $143.24 million. Morgan Stanley’s MSBT recorded $32.41 million, while Ark’s ARKB saw $5.04 million. All other spot Bitcoin ETFs saw zero net flows, as per data from Farside Investors.

Smart Money Buys Bitcoin Amid Strong Whale Accumulation

Bitcoin wallets holding between 100 and 1,000 BTC have added 113,950 BTC since July 15. Analytics firm Santiment reported that they have increased their collective holdings by 2.22% to roughly 5.24 million BTC.

They said this wallet cohort has historically shown a close correlation with broader crypto market direction. Its five-year analysis found that accumulation by 100–1,000 BTC wallets has often occurred before or during stronger market periods.

Bitcoin price has also climbed sharply since mid-August, while this group continued accumulating. This suggests that the recent BTC rally has been accompanied by buying from well-capitalized holders.

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets involve substantial risk.